Structured Note Rules May Fail to Resolve Confusion Over Pricing
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A move to improve pricing transparency for U.S. structured notes may be undercut by the tendency for issuers to use their own models and assumptions to value the complex products.
The Securities and Exchange Commission plans to require banks to disclose an estimated initial value of their securities in offering documents and describe how they arrived at prices for the bond and derivatives components, according to a report from securities law firm Morrison & Foerster LLP last month.